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How To Buy Auto Insurance?

It seems like every time you turn on the TV, YouTube, or look at Social Media you are being bombarded with Ads about buying Auto Insurance. All of these companies claim they have the best coverage or have the lowest price. So how do you see through all the clutter to make the right choice? Here are some quick facts about Buying Auto Insurance to help make this process easy for you.

Should I Buy Direct, Online, Or through an Insurance Agent?

What a lot of Online and Direct Insurance companies want you to believe is by using an Insurance Agent you will pay more. This is not true! When buying Auto Insurance, you should contact an Insurance Agent. They typically have access to multiple carriers so they can find you the best rate, and save you from wasting your time contacting numerous companies.

Does It Matter Where I Buy Auto Insurance? Aren’t All Insurance Companies The Same?

This is another misconception people have when Buying Auto Insurance. Each Insurance company has their version of an Auto Insurance policy. Some will have exclusions in the policy that others won’t have. This could lead to a potential Auto Insurance claim not getting paid based on an exclusion in your Auto policy that you were never informed about. That’s what makes Buying Auto Insurance through an Insurance Agent important. They can help you navigate through these exclusions, and help you understand them.

Should I Just Go For The Cheapest Price?

In most cases, cheapest is not the best. You want to understand first what Auto Insurance coverages are important to you. Then you can build a program that fills that need. Sometimes this could end up being the cheapest. Just don’t fall into the trap of requesting “Just give me the cheapest Auto Insurance”. Asking for the cheapest without being educated about the coverage usually leads to coverage gaps, and denied Insurance claims down the road.

What Auto Insurance Coverage Should I Buy?

I’m going to make this simple. Make sure you have the right amount of Liability Insurance. This is the most critical decision you can make when Buying Auto Insurance. Liability Insurance protects you from someone else in an auto accident. If you have a low limit of Liability Insurance, you could face a lawsuit if the claim exceeds your coverage limits. You can purchase a higher amount of Liability Insurance coverage for just a few extra bucks a month. Most Direct and Online Insurance companies will automatically quote you the minimum Liability Limits, so you need to watch out for this, or I recommend using an Insurance Agent.

Final Thoughts About How To Buy Auto Insurance

In closing, you can buy Auto Insurance anywhere. However, if you want someone to have your best interests in mind, you need an Insurance Agent. Direct & Online Carriers, build their businesses on premiums, while Insurance Agents build their businesses on relationships.

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Is Workers Compensation Insurance Required for Virginia Businesses?

I bet this question has crossed your mind a few times since you decided to open your own business. Many are uncertain about what are the state requirements regarding Workers Compensation Insurance in Virginia. This is understandable since there are several parts to the law that you must understand in order to be certain if you are required to have coverage.

More Than Two Employees

Virginia Workers Compensation Insurance is required if you have more than two employees. This includes full-time and part-time employees. If your business is an LLC or Corporation, the executive officers, and members also count as employees.

Sole Proprietors

Sole Proprietors are exempt from Virginia Workers Compensation Insurance. You can elect to be covered, and you would be required to obtain coverage if you have more than two employees.

Independent Contractors/1099 Employees

1099 Independent Contractors are considered “employees” under Virginia Workers Compensation law. How you pay someone does not determine their work status. If you control their wage, time worked, or where they work the state defines them as an employee. This part of the law is the most important and misunderstood by business owners.

Businesses Outside Of The State Doing Business in Virginia

Businesses not based in Virginia but doing business here must obtain Workers Compensation Insurance. Even if you are working temporality in Virginia, you will still need to obtain coverage.

Volunteers

Volunteers are not subject to Virginia Workers Compensation law. The reason for this is they do not meet the classification of “employee” since they are not paid a wage, and are free to work when they want to.

Penalty For Not Having Virginia Workers Compensation Insurance

If you do not obtain Workers Compensation Insurance the fine could be $250 each day without coverage, up to a maximum fine of $50,000. Obviously, you want to make sure you obtain coverage to avoid the penalty.

Final Thoughts

Hopefully, you have a better understanding of the Virginia Workers Compensation Insurance requirements. This coverage is probably the most important aspect of business insurance since it involves your employees. I highly recommend you obtain Workers Compensation Insurance even if you aren’t required by law to have it. If you would like more information about what’s covered under Workers Compensation Insurance, or how much Workers Compensation Insurance costs, click here.

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Is My Home or Rental Covered by Insurance If Used as an Airbnb?

In today’s world, technology has made it easier than ever to help create extra income from hosting your home, or secondary property on short-term rental sites like Airbnb.

This platform has helped to turn unused or underused spaces into income generating properties for their owners while creating the largest online purveyors of lodging in the world!

Unfortunately, most forget the impact that hosting short-term rentals has on their personal insurance policies.

3 Reasons Why Your Homeowner’s Insurance Will Not Cover Short-Term Rental Claims

  1. Homeowners Insurance is a personal insurance product. Short term rentals (Airbnb, VRBO, etc.) are considered commercial risks in the insurance world. This makes these types of properties ineligible for coverage.
  2. Potential losses can’t be easily identified. Currently, the short-term rental market is still very new. This makes it hard for insurance companies to predict the size and scope of potential claims. It could take several more years before traditional insurance companies will start including short-term rental use in their homeowner’s insurance policies.
  3. Insurance companies will have to update the insurance contract. This will be a costly process for insurance companies since the process requires approval from every state in which the company offers homeowners insurance. This issue is probably the most likely issue why insurance carriers have not moved faster for accommodating for short-term rentals for Airbnb hosts.

Does Airbnb cover my home in case it is damaged by guests?

Airbnb provides Host Protection Insurance and has a Host Guarantee. Let’s take a closer look at what Airbnb provides that your homeowner’s insurance excludes.

Airbnb Host Protection Insurance

This is an actual commercial general liability policy that provides up to $1,000,000 of coverage for liability claims that do not result in damage to the host’s own property. An example of a potential loss could be a fire caused by a guest that damages your neighbor’s penthouse causing $300,000 loss. You can view the actual Airbnb Host Protection Insurance here. (link to pdf summary should we require email address to open document)

Key Points about Airbnb Host Protection Insurance:

  1. There is no additional cost to the host for the coverage.
  2. Claims will be handled by professional insurance claims adjusters.
  3. Airbnb does a good job of ensuring their hosts have protection from liability losses.
  4. The only negative would be you are limited to a $1,000,000 limit. If you are legally liable for burning down your apartment/condominium building, $1,000,000 would not be enough coverage.

Airbnb Host Guarantee

This is a “Guarantee” from Airbnb that they will pay up to $1,000,000 in property damages to your property that is caused by a guest. View the Airbnb Host Guarantee now.

Key Points about Airbnb Host Guarantee:

  1. This is just a promise, not actual insurance provided. Airbnb specifically mentions that you still must have your own personal insurance policy.
  2. You must file a claim with your insurance company first before you can contact Airbnb. This could potentially increase the time it takes before you can have your damage repaired.
  3. Collectables, fine arts, and jewelry are excluded. If you don’t have these items insured under your homeowners, property, or collectibles insurance policy, no coverage will exist. Airbnb actually recommends on their website that you put these items in a safe place prior to guests arriving.
  4. If you go through the process of utilizing the “Host Guarantee”, you waive your rights to a class action lawsuit. If you already have to waive your rights to enter into the process, what are the chances you will be satisfied with a settlement?

Does an insurance policy exist that would provide for short-term rentals such as Airbnb?

Fortunately, a few insurance companies have created a program that combines homeowners and property insurance with short-term rental coverage for Airbnb hosts.

Key Points about Short Term Rental Insurance for Airbnb Hosts:

  1. This insurance policy has your traditional home insurance coverages, with short-term rental insurance included. This policy will replace your current homeowners or property policy.
  2. Claims are handled on a primary basis, which means a quick turnaround for your claim to get paid.
  3. You have the ability to ensure the property for the amount of coverage you want and for replacement of your home or rental policy.
  4. Cost is affordable and runs about 20-30% more than what you are currently paying. However, you are properly covered by using your property as a short-term rental.

The takeaway from our discussion is you MUST have a short-term rental policy if you want to host with Airbnb or any other short-term rental site. Airbnb has gone to great lengths to provide some protection for their hosts and should be appreciated for doing so. Your next step should be having a conversation with your current insurance agent to make sure you obtain the proper insurance coverage for Airbnb hosts. If you would like for us to provide you with a quote or even more information on short-term rental insurance, please complete our short “Get a Quote” form.

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Cyber-attack: Is Your Business at Risk?

The answer to the above question is most likely, yes.

It is estimated that less than 5% of business owners carry Cyber Liability coverage. However, the threat of this type of risk grows every single year, and in many cases, could be a more likely occurrence than a fire loss to your business.

Cyber risk insurance, or what is often referred to as data breach insurance, can protect many aspects of your business such as unauthorized access, theft, human error, and ransomware attacks. The typical cost to protect, restore, and secure a single lost/stolen record is $217. A large loss could literally put you out of business.

In May 2017, one of the largest global cyber-attacks took place affecting 200,000 computers with ransomware.  Ransomware locks your computer and makes you pay a “ransom” to have access again. The ransom in this instance was $300 per computer.

In another claim scenario, a contractor plugged in a flash drive to a computer controlling a manufacturing production line and accidentally corrupted the computer. The production line was down for 2 days costing over $400,000 in lost revenues.

Without Cyber Liability coverage, no coverage would exist for either scenario. The good news, most insurance companies offer an endorsement or a standalone policy you can purchase to make sure you are properly covered.

If a cyber security endorsement is available this may be the cheaper way to go, but coverage limits could be low, and they may have specific exclusions. A stand-alone cyber risk policy would offer higher limits, and fewer exclusions, however, will have a higher cost. The best thing to do is speak with your insurance agent to help you determine what cyber insurance coverage is best for your business.

If you have any further specific questions about Cyber Liability Coverage, contact us here at Homestead, we will be glad to assist you.

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The Secret Behind Reducing Your Auto Insurance Rates

I knew this title would get your attention! All jokes aside, this topic has been discussed over and over since the beginning of the auto insurance industry — “How Can I Lower My Car Insurance Rates?”

I’m sure when you asked this question to your insurance agent they gave you the same tried and true responses:

  1. “Our company has taken a slight rate increase for all drivers in your area”
  2. “Your car is getting older, therefore it is costlier to repair in the event of a claim”
  3. “Looks like you got another seat belt ticket”
  4. “You are getting older, insurance actually increases as your age increases”
  5. “Looks like your credit score made your rate go up”

I’m sure at some point you heard one, or even two of these explanations over time. I am also sure that the solutions provided to reduce your rate were: Reducing coverage, paying in full, going paperless, or rewriting your insurance to a new company that you never heard of.

Wouldn’t it be nice if you could reduce your auto insurance cost without reducing coverage, or making changes to your policy? What if your rate could be tied to your actual driving habits? Well the day has arrived, and it is called Auto Telematics.

Lower Auto Insurance Rates for Good Drivers

More insurance companies are starting to use telematic devices in the rating of auto insurance policies. Some companies do this with a device to plugged into your car, and a few have developed an app for your smartphone. Typically, these devices monitor breaking, miles driven, time driven, idling, and in some cases, speed. All should exclude location monitoring since it would be illegal. The information is gathered over a 3-6 month period and the data is sent back to the insurance carrier.

If your driving habits are good, you could earn anywhere from 10-30% off your auto insurance rate. The best part is, most carriers will allow this discount to apply for the life of the vehicle on your policy. Most carriers will allow you to use this device for all your cars as well. Just think, you could be rewarded for your good driving habits, and pay an insurance rate that is fair based on your specific use of the vehicle.

We suggest that you contact your insurance agent today to discuss adding this program to your insurance policy. If you would like Homestead to help with your auto insurance needs, just give us a call, send an email, or shoot us a text.

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UBER, or LYFT driver? Important Auto Insurance Facts You Should Know.

In today’s world, it is easier than ever to become a solopreneur. In your spare time, you could easily sign up to be a driver, and earn extra income on a part-time or full-time basis. However, most are confused about how this affects their Auto Insurance. Below, I will address several factors that can affect UBER and LYFT drivers.

Will my personal Auto Insurance provide coverage?

It depends, every carrier has a different stance on this subject. Typically, most carriers will exclude coverage during the following “3” events. 1. “Vehicle owner has mobile app “on” but match with a rider has not been made.” 2. “A match with a rider has been made, but the rider is not in the car.” 3. “The rider is in the vehicle being taken to their destination”. If any of these occurrences are taking place, no coverage will be afforded under a traditional personal Auto Insurance policy. However, the insurance world is constantly changing, and some carriers have created “rideshare” policies. You would still want to work with an agent to determine if any coverage gaps exist under this type of policy. UBER or LYFT should also have an option that you can purchase to fill in the above-mentioned coverage gaps.

When I signed up for UBER insurance, it says I have Contingent Collision & Comprehensive coverage. What does that mean?

This means that your Comprehensive & Collision coverage for your vehicle will be secondary to your personal Auto Insurance policy. You will first have to file a claim under your personal Auto Insurance policy, and if the claim is denied then your coverage from UBER will kick in. Ultimately this will create a lengthy claims process, all the while your vehicle remains damaged. Just be aware the process could be a lengthy one.

What happens if my personal Auto Insurance company finds out I drive for UBER or LYFT?

Most likely your policy will be non-renewed, or result in a premium increase. Personal Auto Insurance carriers do not want to have any association with “livery” “chauffeur” risks, unless you have a “rideshare” policy that accommodates the coverage. Make sure you communicate with your insurance agent on what purpose you will be using your vehicle for. Your agent will find you a company, or policy type that will meet your needs.

How much will my insurance cost?

This will depend on many factors such as: driving record, vehicle type, coverage requested, and where you live/operate. You will want to make sure that your policy meets the requirements of UBER or LYFT. I expect as time passes, the cost for “rideshare” policies will continually decrease since insurance carriers will gain more experience insuring this specific type of risk.

Luckily the insurance carrier world is catching up with the needs of UBER and LYFT drivers.  With the right information, and a great relationship with an insurance agent, you should be able to be properly covered without breaking the bank. If you still have questions, please feel free to contact us. We look forward to hearing from you.


6 Workers Compensation Questions Answered Every Business Owner Should Hear

To most employers, Workers Compensation Insurance is a mystery and a dreaded expense much like paying taxes. However, using the lessons below you will be armed with a basic understanding of workers comp insurance and you will be able to manage your coverage, and costs.

When Am I Required To Have Workers Compensation Coverage?

Every state will have their own requirements, however, most adopt the rule of three total employees. Once you have three employees, (this includes part-time and owners) you are required by state law to have Workers Compensation Insurance.

Do 1099 or “Independent Contractors” count as employees?

Again this can vary by state, but the consensus is they do count as employees. If you’re subcontracted, 1099 labor, does not have their own insurance they will count as an “employee”. You will need to provide coverage if you reach the employee limit discussed earlier unless the subcontractor has their own policy.

Am I covered if I provide services in multiple states?

If you perform duties in multiple states you will need to have your policy endorsed to include all the states you work in. Not doing this could cause a potential claim payout. Make sure you discuss which states you operate in with your insurance agent.

What if my organization consists mostly of volunteers?

By law, you are not required to have coverage for volunteer labor. However, this does not exempt you from being liable for a volunteer’s injury. We suggest you still obtain Workers Compensation Insurance to make sure you are protected properly.

Why should I purchase Workers Compensation Insurance if I am not required by law to have it?

Even if you don’t meet the law requirement for coverage, you still should have a policy. Even if your organization has 1 employee, you still would be held liable for injury, and potential compensation for their injury. Having a policy also protects you from being sued for damages exceeding your policy limits, as this is protected by state law.

Workers Compensation is expensive, how can I reduce my cost?

Here are several ways to reduce your cost:

  1. Owners and officers can be excluded from coverage. This could save you thousands in costs depending on the type of work you do.
  2. Separate out your labor force. It is important to keep detailed records for employees performing different tasks. Your office employees carry a much lower rate than your warehouse employees. If you do not keep these separate, insurance companies will include the payroll in your highest classification on your policy.
  3. Develop a safety and drug testing program. If you have these programs in place, you could save up to 10%, and earn future claims free discounts in the future when your policy renews.
  4. Work with an insurance agent that represents multiple insurance companies. This will allow you to obtain the most competitive Workers Compensation Insurance rate. This is very important since Workers Compensation typically is the most expensive of all Commercial Insurance Policies.

Workers Compensation Insurance does not have to be a complex subject. With the right information and a great relationship with an insurance agent, you should be able to be properly covered without breaking the bank. In most cases, when I work with clients that had bad Workers Compensation Insurance experiences in the past, it’s mostly related to poor information, and lack of communication by the insurance agent. If you still have questions, or would like to discuss how we can make Workers Compensation easier for you, please feel free to contact us. We look forward to hearing from you.


Am I Insured While Operating a Drone?

This question has come up more frequently over the past couple of years. Most individuals have not thought of the liability exposure when operating a drone for pleasure, or for business use. These exposures can consist of property damage, bodily injury, and invasion of privacy. Here are some facts concerning drone usage personally, and professionally:

Personal Drone Use Insurance

  1. You must have a Homeowners or Renters Insurance policy to be covered for property damage, and bodily injury liability. Coverage will only be up to your policy limits, which are typically $300,000. You might have a gap in coverage if you severely injure another person. Obtaining a higher liability limit of $1,000,000 is suggested.
  2. Liability from your Homeowners or Renters Insurance does not extend to invasion of privacy claims. For instance, you are taking aerial photos of your neighborhood, and you inadvertently snapped a photo of someone “sun-bathing” in their backyard. You could be subject to a lawsuit, and no coverage will be provided under your insurance policy.
  3. Damage to yourself or family members will not be covered under your Bodily Injury Liability coverage. You cannot be liable to yourself, so you will want to make sure you have appropriate health insurance.
  4. Damage to your personal property will be covered under the appropriate policy coverage. For example:  If your drone falls and hits your car, this would be covered under Automobile comprehensive coverage. However, if you do not have comprehensive under your Auto Insurance policy no coverage will be provided.
  5. Damage to the drone in most cases would be covered under your Homeowners or Renters insurance policy. This would be subject to your policy deductible.
  6. Beware of letting a friend operate your drone. Liability follows the owner, so if your friend causes property damage or bodily injury you would be held liable.

Commercial Drone Use Insurance

  1. You must have Commercial Liability Insurance to be covered for property damage, and bodily injury liability. Coverage will only be up to your policy limits and could have exclusions, so make sure you review your current policy for any drone operation exclusions.
  2. An “insured” operator must be an owner, partner, spouse, or employee of the business. Letting your buddy operate the drone will not extend coverage from your Commercial Liability Insurance policy.
  3. Again, most policies will exclude coverage for invasion of privacy claims. You may want to consider purchasing a “drone liability” policy, which we will discuss later.
  4. Damage to the drone would be covered under Business Personal Property or Inland Marine policy. Discuss this with your insurance agent to see what would be more appropriate for your business.
  5. Injury to yourself or employees by the drone will fall under Workers Compensation Insurance. Make sure you have this coverage in place.
  6. Damage to your building, vehicles, or equipment by the drone will be subject to the appropriate policy covering those items. Again, your Commercial Liability Insurance will not provide the coverage, since you cannot be liable to yourself.

What Should I Do To Make Sure I Have Appropriate Insurance?

  1. You should speak to your agent, and explain what you will be doing with the drone. Your agent should be able to advise you on the measures you need to take to ensure you have proper coverage.
  2. You should look at carriers that specialize in drone liability coverage. For example, the company Verify, https://verifly.com/ provides up to $1,000,000 of short-term liability coverage while the drone is in flight. Their website states that coverage can be purchased for as little as $10 an hour depending on flight path, and drone type. This is an app you can download and will communicate with your drone to charge you the correct premium. After reviewing their sample policy, it appears to have broader coverage especially those operating drones commercially. They also extend liability to invasion of privacy claims, if deemed accidental. Their policy excludes liability coverage for packages or other items carried by the drone during flight.

Hopefully, we dispelled some of the myths and offered some clear concise information about insuring your drone. Drones are a lot of fun personally and have a lot of useful business applications as well.  Proper drone usage should be encouraged and insured appropriately.  If you wish to discuss this topic further, we look forward to hearing from you.  


Google to Sell Auto Insurance, Death of the Local Agent?

Since the announcement this week from Google about venturing in the Auto Insurance market, many of my colleagues and clients wanted to know if I am concerned. I responded with a resounding “No”.

How could I be so confident when Google is one of the largest companies in the world, billions to throw towards this market, and the largest search engine in world? Two words come to mind Promise, and Trust. Google, or any other Direct Insurance Carrier, no matter how much money they invest, cannot sell a promise or trust.

A local insurance agent can sell these two things because their livelihood depends on it. A promise is a guarantee that I will advise a client about the best coverages they should have, be by their side in the event of a claim, and be their advocate if necessary. Do you think in your time of need, that a service center hundreds or thousands miles away will have the same level of concern? No, because you don’t have an identity, you are just a policy number, and a premium.

Trust is earned through the relationship, my clients know that I always have their interests first, not the Insurance Carrier’s, or my own. When you have a great local agent, we are your friends, your confidant, and your advisor. Clients have an identity with a local agent. You can sit across our desks, when you need us the most, and you know we will deliver. This is what the local agent model is built on. If we cannot provide a promise, and gain your trust, we cannot compete with companies like Google.

Google sees you as a profit to satisfy their stockholders, and data that could be potentially mined and sold to other “affiliated” retailers. They are promoting that you can shop multiple carriers, and find the best price.

Most people believe that using a local agent is more expensive than going to a direct carrier. This is also false. You can use a local agent to find a great price, and have access to an experienced agent that will represent you in your time of need.

Google and the Internet did not, and will not kill the local agent.

This competition made us adapt, and become stronger than ever before. So I ask of you, are you ready to place protecting your assets, yourself, and your family in the hands of Google? If not, your local agent will be here with a promise, and ready to earn your trust.